City asks if parking subsidy is well spent
- Andy Giegerich
- Portland Tribune - News
• Scrutiny of costs at Smart Park garages comes back around once more
When Portland budget leaders announced last week that the city needs to drastically reduce expenses at its six Smart Park garages, their words were familiar to many insiders' ears.
That's not surprising. An April 1989 Audit Services Division report foreshadowed many points raised in last week's study, released by Portland's General Services Division. The new study suggests that the city either rebid the contract or eliminate its arrangement with the business group that oversees the contract.
While the 2002 version suggests several ways the city could save $1.6 million annually, both reports urged the city to diminish the role of what's now called the Portland Business Alliance, which promotes Smart Park services.
In 1989, the auditors suggested that the city 'review the current management and promotion contract and city overhead charges to lower costs to reasonable levels.' In 2002, consultants recommend that the city reduce garage marketing costs.
City leaders say the 1989 proposals more or less fell by the wayside.
'There was kind of a drift there,' recalled Gary Blackmer, the city auditor.
'My sense is they did take care of some of the costs, but personnel changes over time and the framework and viewpoint have changed, and sometimes you end up going back to where you were in the past.'
Regardless of the previous recommendations, the 2002 report has placed the Portland Business Alliance Ñ fast becoming Portland's most powerful lobbying group Ñ at loggerheads with the city.
As the city wonders whether it pays the alliance too much to manage area Smart Park garages, the alliance retorts that its marketing efforts, such as radio ads, have actually increased the program's revenues.
The alliance charges about $3 million a year for its services, said Ron Bergman, director of the city's General Services Department. The services include overseeing a second operating contract with City Center Parking, which operates the garages.
'There are only two players typically in most communities: That includes the owner and operator without a party in between,' Bergman said.
The latest report, by Portland-based researcher Barney & Worth, identifies 'redundant management layers' in the Smart Park setup that Bergman's department could either eliminate or drastically streamline.
The new report, released Thursday, says Portland pays 50 percent more than other cities charge for their municipally owned parking lots. Smart Park costs led to a $200,000 program deficit last year.
What's more, the report pointed out that the city's garage revenues help Ñ to the tune of $1.9 million annually Ñ defray bond costs for the Portland Streetcar. Another $1.3 million from the garage coffers goes to the Portland Department of Transportation.
The Smart Park system includes six city-owned parking garages sprinkled through downtown. Three sit in downtown's core, at Southwest Third Avenue and Alder Street, Southwest Fourth Avenue and Yamhill Street, and Southwest 10th Avenue and Yamhill Street.
The six garages' 3,825 spaces accommodate about 2.5 million parkers annually. The city charges 95 cents an hour for the first four hours and $2 an hour for the next four hours, capping the fees at $12 per day.
The Portland Business Alliance provides day-to-day management and promotional services. The alliance also administers a separate contract with City Center Parking.
The scenario often forces Greg Goodman, City Center Parking's president and an influential alliance board member, to recuse himself from alliance discussions of garage oversight.
'That's the one place I won't go: I don't get involved at the alliance with the garages,' Goodman said. 'I don't even know how much they get from the city.'
Whatever the alliance gets, the city wants to give it less. The Barney & Worth study found that the city pays an average $1,200 yearly to maintain each parking space.
That figure far exceeds the average in Beverly Hills ($962 per space) and Santa Monica ($557), two California cities with which Portland was directly compared.
Walker Parking Consultants, based in Burbank, Calif., tracks costs in 1,000 cities and says those cities paid an average of $474 per space.
Tom Turner, the alliance's vice president of public space management, said, however, that such comparisons aren't germane.
'The revenues in Santa Monica per parking space are $1,700; in Portland, it's a little over $2,400,' Turner said.
What's more, the alliance says its programs have helped boost Smart Park revenues by 75 percent over the past 10 years.
'Expenses are only up 36 percent in that time,' Turner said. 'Any time revenues rise at a rate more than twice expense, something's going right.'
On one hand, the city 'summarizes that Smart Park is very well known, one of the most successful value parking programs in the country,' said John Czarobski, the alliance's public relations manager. 'On the other hand, they're calling into question the investment that's made that happen.'
On the benchmarks
Despite harsh words on both sides, Bergman said the garage management issue doesn't represent a fissure in the city's increasingly shaky relationship with the alliance.
'This is more about rebidding the contract to get our costs more in line with the benchmarks,' Bergman said. 'It doesn't mean 'eliminating the middle man,' although it does mean we have to sharpen our pencils.'
Bergman said the garage-funded marketing programs, while effective, benefit all of downtown, not just Smart Park.
'The 'I'd rather be downtown' campaign is all funded by the parking program,' he explained. 'It's really support for downtown, rather than parking activity, even though it's all charged to parking.'
The alliance first began its garage contract in 1982, when it was known as Association for Portland Progress. Bill Wyatt, the current Port of Portland executive director, served as head of APP when it secured the operating agreement.
'Having this parking system actually became a great way to market downtown Portland,' he said. 'It's important to have a vibrant central city, and I think the garages are a logical resource for that purpose.'
The pending debate over Smart Park's expenses will certainly draw interest. But one player, the usually opinionated Goodman, said he'll keep an arm's length from the developing conflict.
'The thing is, everyone's interested in the same thing: for the garages to do well,' he said.